Utility Sales Tax Exemption
Manufacturing and processing facilities often qualify for a sales tax exemption on the portion of their utilities used for production purposes. Our market research suggests that 1 out of every 3 eligible facilities are not taking advantage of this beneficial savings opportunity.
Nearly every state offering this tax exemption requires the taxpayer calculate the percentage of utility consumed by qualified production items at the facility. This consumption analysis is commonly referred to as a utility study. The utility study must be detailed and adhere to specific state requirements, including proper designation of equipment as exempt or taxable in accordance with statutory language.
Eligible States

Exemption statutes are significantly different from state to state regarding the taxability of certain utility usage. Additionally, each state is unique in the documentation it requires to support the exemption claim. Limited exemption offering for Kentucky and Alabama.
TAX REFUND AND FUTURE SAVINGS
Savings from the tax exemption occur in two ways. First, by filing an exemption certificate with the utility provider, the taxpayer no longer incurs the full sales tax charge on their utility invoices, resulting in savings each month into the future. Secondly, a refund may be claimed from the state for the sales tax paid on utility invoices for the last 3 to 4 years.
SPECIALIZED EXPERTISE TO HELP YOU CAPITALIZE
B. Riley has the specialized expertise needed to help eligible clients capitalize on the utility sales tax exemption. Our utility tax specialists manage the entire exemption process for the client, from qualification to refund. The specialists perform the required utility study, collect all relevant documentation to support the exemption claim, communicate with state agencies and utility providers, and ensure the client is fully refunded all overpaid sales tax and properly setup for the exemption on future utility purchases. Additionally, each utility study and exemption claim are reviewed by a tax attorney and engineer to ensure compliance and accuracy.
In many cases B. Riley works on a contingency-fee basis, meaning the client owes nothing until savings are achieved through the exemption. Unique savings opportunities such as the utility sales tax exemption call for trusted experts with specialized experience. B. Riley has the expertise needed to diligently represent clients and achieve optimal savings through the exemption.
OUR PROCESS
1. Complimentary Review
The client's utility invoices for each location are
analyzed to assess eligibility and determine the amount of savings achievable
through the exemption. Upon completion of this review, a feasibility analysis
is prepared and given to the client.
2. Utility Study
Specialists perform a detailed analysis of the client's
utility usage at each location, determining the percentage of utility that
qualifies for sales tax exemption.
3. Refund Filing
A request for refund of sales tax is submitted to the state
for review and approval. B. Riley's experts communicate directly with the state
to answer questions and ensure the client is fully refunded for all sales tax
due.
4. Approval
Upon state approval, the client receives a lump-sum tax
refund in the form of a check or credit to their utility accounts. An exemption
certificate is filed for each utility account and the client is no longer
charged sales tax on the exempt portion of their usage.
KEY CONTACT

Kennedy White
ELIGIBLE STATES
Taxpayers with manufacturing or processing facilities located in the states below are eligible for the utility sales tax exemption.
Manufacturers and industrial processors with facilities
located in Alabama may be eligible for a utility tax exemption. Alabama offers
an exemption from utility gross receipts tax on the purchase of electricity,
natural gas, and water used in qualifying production activities. This tax
exemption is authorized by Alabama Code § 40-21-83 and 40-21-103
Exemption Language of Alabama Code § 40-21-83 and 40-21-103
Electricity when "used in an electrolytic or
electrothermal manufacturing or compounding process." Natural gas when
"used as a chemical raw material in the manufacturing or compounding
process, but not as fuel or energy." Water when "50% or more is used
in industrial processing."
Utility Study Requirement for Exemption Qualification
Utility studies are typically not allowed in Alabama.
Instead, utility consumption must be separately metered. One of our
representatives can help you assess eligibility of your usage and assist in the
qualification process.
Alabama Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 4%
Average Local Sales Tax Rate: 5.22%
Helpful Resources
Alabama
Utility Exemption Certificate: Form
ST: EX-A1-SE
Alabama
Utility Exemption Statute/Rule: Alabama Code § 40-21-83 and 40-21-103
Alabama
Claim Form for Tax Refund: Petition
for Refund
Manufacturers and industrial processors with facilities
located in Arkansas may be eligible for a utility tax exemption. Arkansas
offers an exemption from the full state sales tax rate on the purchase of
electricity, natural gas, and water used in qualifying production activities.
This tax exemption is authorized by Act 1411 of 2014.
Exemption Language of Act 1411 of 2014
"Sales of natural gas and electricity to a manufacturer
for use directly in the manufacturing process will be taxed" at a sales
tax rate of 0.625%.
Utility Study Requirement for Exemption Qualification
An Arkansas utility tax study must list every piece of
equipment and appliance (production and non-production) that uses the utility
and the annual consumption of each. Failure to properly calculate or classify
utility usage is cause for denial of the exemption.
Arkansas Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 6.5%
Average Local Sales Tax Rate: 2.97%
Helpful Resources
Arkansas
Utility Exemption Certificate: Form
ET-186 A
Arkansas Utility Exemption Statute/Rule: Act 1411 of 2014
Arkansas
Claim Form for Tax Refund: Application
for Refund
Manufacturers and industrial processors with facilities
located in Colorado may be eligible for a utility tax exemption. Colorado
offers an exemption from state sales tax and some local taxes on the purchase
of electricity, natural gas, and water used in qualifying production
activities. This tax exemption is authorized by C.R.S. §39-26-102(21).
Exemption Language of C.R.S. §39-26-102(21)
"The sale, use, storage, or consumption of electricity,
coal, gas, fuel oil, steam, nuclear fuel, and coke... are exempt from sales and
use tax when used for any of the following purposes: processing, manufacturing,
mining, refining... and all industrial uses."
Utility Study Requirement for Exemption Qualification
A Colorado utility tax study must list every piece of
equipment and appliance (production and non-production) that uses the utility
and the annual consumption of each. Failure to properly calculate or classify
utility usage is cause for denial of the exemption.
Colorado Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 2.9%
Average Local Sales Tax Rate: 4.75%
Colorado
Utility Exemption Certificate: Form
DR 1666
Colorado
Utility Exemption Statute/Rule: C.R.S. §39-26-102(21)
Colorado
Claim Form for Tax Refund: Claim
for Refund - DR 0137B
Manufacturers and industrial processors with facilities
located in Connecticut may be eligible for a utility tax exemption.
Connecticut offers an exemption from state sales tax on the purchase of
electricity, natural gas, and water used in qualifying production activities.
This tax exemption is authorized by Conn. Gen. Stat. §12-412(3) &
(16).
Exemption Language of Conn. Gen. Stat. §12-412(3) & (16)
"The sale, furnishing or service of gas, including
bottled gas, and electricity when delivered to consumers through mains, lines,
pipes or bottles for use... directly in agricultural production, fabrication of
a finished product to be sold or an industrial manufacturing plant, provided
the exemption under this subdivision (ii) shall only be allowed with respect to
a metered building, location or premise at which not less than seventy-five per
cent of the gas, including bottled gas, or electricity consumed at such metered
building, location or premise is used for the purpose of such production,
fabrication or manufacturing."
Utility Study Requirement for Exemption Qualification
A Connecticut utility tax study must list every piece of
equipment and appliance (production and non-production) that uses the utility
and the annual consumption of each. Failure to properly calculate or classify
utility usage is cause for denial of the exemption.
Connecticut Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 6%
Average Local Sales Tax Rate: 0%
Helpful Resources
Connecticut
Utility Exemption Certificate: CERT-115
Connecticut
Utility Exemption Statute/Rule: Conn. Gen. Stat. §12-412(3) & (16)
Connecticut
Claim Form for Tax Refund: Assignment
of Retailer's Rights for Refund
Manufacturers and industrial processors with facilities
located in District of Columbia may be eligible for a utility tax exemption.
District of Columbia offers an exemption from sales tax on the purchase of
electricity, natural gas, and water used in qualifying production activities.
This tax exemption is authorized by D.C. Code § 47-2005(11).
Exemption Language of D.C. Code § 47-2005(11)
Sales of natural or artificial gas, oil, electricity, solid
fuel, or steam, directly used in manufacturing, assembling, processing, or
refining of tangible personal property for sale or resale" are exempt from
tax.
Utility Study Requirement for Exemption Qualification
A District of Columbia utility tax study must list every
piece of equipment and appliance (production and non-production) that uses the
utility and the annual consumption of each. Failure to properly calculate or
classify utility usage is cause for denial of the exemption.
District of Columbia Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 6.35%
Average Local Sales Tax Rate: 0%
Helpful Resources
District
of Columbia Utility Exemption Certificate: Form
OTR-308
District
of Columbia Utility Exemption Statute/Rule: D.C. Code § 47-2005(11)
District
of Columbia Claim Form for Tax Refund: Claim
for Refund - FP-331
Manufacturers and industrial processors with facilities
located in Florida may be eligible for a utility tax exemption. Florida offers
an exemption from state sales tax and some local taxes on the purchase of
electricity, natural gas, and water used in qualifying production activities.
This tax exemption is authorized by F.S. § 212.08(7)(ff).
Exemption Language of F.S. § 212.08(7)(ff)
Charges for electricity or steam used to operate machinery
and equipment at a fixed location in this state when such machinery and
equipment is used to manufacture, process, compound, produce, or prepare for
shipment items of tangible personal property for sale, or to operate pollution
control equipment, recycling equipment, maintenance equipment, or monitoring or
control equipment used in such operations are exempt" ONLY INDUSTRIES: SIC
10, 12, 13, 14, 20, 22 - 39, and 212 and NAICS 423930.
Utility Study Requirement for Exemption Qualification
A Florida utility tax study must list every piece of
equipment and appliance (production and non-production) that uses the utility
and the annual consumption of each. Failure to properly calculate or classify
utility usage is cause for denial of the exemption.
Florida Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 4%
Average Local Sales Tax Rate: 3.31%
Helpful Resources
Florida
Utility Exemption Certificate: Florida
Purchaser's Exemption Certificate for Electricity or Steam
Florida
Utility Exemption Statute/Rule: F.S. § 212.08(7)(ff)
Florida
Claim Form for Tax Refund: Application
for Refund - DR-26S
Manufacturers and industrial processors with facilities
located in Georgia may be eligible for a utility tax exemption. Georgia offers
an exemption from state and local sales tax on the purchase of electricity,
natural gas, and water used in qualifying production activities. This tax
exemption is authorized by O.C.G.A. § 48-8-3.
Exemption Language of O.C.G.A. § 48-8-3
"The sale and use of energy are exempt from sales and
use tax if the energy is: (1) necessary and integral to the manufacture of
tangible personal property and (2) sold, used, stored, or consumed at a
manufacturing plant in Georgia."
Utility Study Requirement for Exemption Qualification
Georgia does not have a standard utility tax study
requirement. Please contact us for more information regarding the requirements
for claiming the exemption in Georgia.
Georgia Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 6%
Average Local Sales Tax Rate: 1.05%
Helpful Resources
Georgia
Utility Exemption Certificate: Form
ST-5M
Georgia
Utility Exemption Statute/Rule: O.C.G.A. § 48-8-3
Georgia Claim Form for Tax Refund: ST-12 Claim for Refund
Manufacturers and industrial processors with facilities
located in Indiana, may be eligible for a utility tax exemption. Indiana offers
an exemption from state sales tax on the purchase of electricity, natural gas,
and water used in qualifying production activities. This tax exemption is
authorized by Ind. Code §
6-2.5-5.1(b).
Exemption Language of Ind. Code § 6-2.5-5.1(b).
"Transactions involving tangible personal property
[including electrical energy, water, and natural gas] are exempt from the state
gross retail tax if the person acquiring the property acquires it for direct
consumption as a material to be consumed in the direct production of other
tangible personal property in the person's business of manufacturing,
processing, refining, repairing, mining, agriculture, horticulture,
floriculture, or arboriculture."
Utility Study Requirement for Exemption Qualification
An Indiana predominant use study must list every piece of
equipment and appliance (production and non-production) that uses the utility
and the annual consumption of each. Failure to properly calculate or classify
utility usage is cause for denial of the exemption.
Indiana Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 7.00%
Average Local Sales Tax Rate: 0%
Helpful Resources
Indiana
Utility Exemption Certificate: Form ST-200
Indiana
Utility Exemption Statute/Rule: Ind. Code §
6-2.5-5.1(b).
Indiana
Claim Form for Tax Refund: GA-110L Claim for
Refund
Manufacturers and industrial processors with facilities
located in Iowa, may be eligible for a utility tax exemption. Iowa offers an
exemption from state and local sales tax on the purchase of electricity,
natural gas, and water used in qualifying production activities. This tax
exemption is authorized by I.A.C. 701-17.2.
Exemption Language of I.A.C. 701-17.2
"Receipts from the sale of tangible personal property
which is to be consumed as fuel in creating power, heat or steam for
processing, including grain drying or for generating electric current, shall be
exempt from sales tax."
Utility Study Requirement for Exemption Qualification
An Iowa utility tax study must list every piece of equipment
and appliance (production and non-production) that uses the utility and the annual
consumption of each. Failure to properly calculate or classify utility usage is
cause for denial of the exemption.
Iowa Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 6%
Average Local Sales Tax Rate: 0.94%
Helpful Resources
Iowa
Utility Exemption Certificate: Exemption
Certificate 31-113a
Iowa
Utility Exemption Statute/Rule: I.A.C. 701-17.2
Iowa
Claim Form for Tax Refund: IA
843 Claim for Refund
Manufacturers and industrial processors with facilities
located in Kansas, may be eligible for a utility tax exemption. Kansas offers
an exemption from state and local sales tax on the purchase of electricity,
natural gas, and water used in qualifying production activities. This tax
exemption is authorized by K.S.A. 79-3602(dd).
Exemption Language of K.S.A. 79-3602(dd)
"Tangible personal property [including electricity, gas
and water] which is essential or necessary to and which is used in the actual
process of and consumed, depleted or dissipated within one year in the
production, manufacture, processing, mining, drilling, refining or compounding
of tangible personal property" is exempt from sales and use tax."
Utility Study Requirement for Exemption Qualification
A Kansas utility tax study must list every piece of
equipment and appliance (production and non-production) that uses the utility
and the annual consumption of each. Failure to properly calculate or classify
utility usage is cause for denial of the exemption.
Kansas Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 6.5%
Average Local Sales Tax Rate: 2.18%
Kansas
Utility Exemption Certificate: Exemption
Certificate ST-28B
Kansas
Utility Exemption Statute/Rule: K.S.A. 79-3602(dd)
Kansas
Claim Form for Tax Refund: ST-33
Claim for Refund
Manufacturers and industrial processors with facilities
located in Kentucky, may be eligible for a utility tax exemption. Kentucky offers
an exemption from state sales tax and gross receipts tax on the purchase of
electricity, natural gas, and water used in qualifying production activities.
This tax exemption is authorized by Section 103 KAR 30:140.
Exemption Language of Section 103 KAR 30:140
"Taxpayer may claim exemption on the purchase of energy
or energy-producing fuel if these costs "exceed 3 percent of the cost of
production."
Utility Study Requirement for Exemption Qualification
A Kentucky utility tax study should list every piece of
equipment and appliance (production and non-production) that uses the utility
and the annual consumption of each. Additionally, cost of production
calculations are needed to determine whether the cost of energy exceeds 3% of
the total cost of production.
Kentucky Statute of Limitations on Tax Refund
4 years
State Sales Tax Rate: 6%
Average Local Sales Tax Rate: 0%
Helpful Resources
Kentucky
Utility Exemption Certificate: Application for Direct Pay 51A109
Kentucky
Utility Exemption Statute/Rule: Section
103 KAR 30:140
Kentucky
Claim Form for Tax Refund: Energy
Exemption Annual Return
Manufacturers and industrial processors with facilities
located in Maine, may be eligible for a utility tax exemption. Maine offers an
exemption from state sales tax on the purchase of electricity, natural gas, and
water used in qualifying production activities. This tax exemption is
authorized by 36 M.R.S. § 1760(9-D).
Exemption Language of 36 M.R.S. § 1760(9-D)
"The sale of all other fuel and electricity used at a
manufacturing facility is 95% exempt from sales tax. The remaining 5% is
subject to the general sales and use tax rate. In the dual-use context the
customer must break down to the nearest 10% the taxable and nontaxable
portions."
Utility Study Requirement for Exemption Qualification
A Maine utility tax study must list every piece of equipment
and appliance (production and non-production) that uses the utility and the
annual consumption of each. Failure to properly calculate or classify utility
usage is cause for denial of the exemption. A square footage analysis may also
be appropriate in Maine.
Maine Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 5.5%
Average Local Sales Tax Rate: 0%
Helpful Resources
Maine
Utility Exemption Certificate: Exemption
Certificate ST-A-117
Maine
Utility Exemption Statute/Rule: 36 M.R.S. § 1760(9-D)
Maine
Claim Form for Tax Refund: Go to utility provider for refund.
Manufacturers and industrial processors with facilities
located in Maryland, may be eligible for a utility tax exemption. Maryland
offers an exemption from state sales tax and some local taxes on the purchase
of electricity, natural gas, and water used in qualifying production
activities. This tax exemption is authorized by Md. Code Regs. 03.06.01.10(A).
Exemption Language of Md. Code Regs. 03.06.01.10(A)
"The sale of gas, electricity, steam, oil, or coal,
consumed directly and predominantly in a production activity… is not subject to
tax."
Utility Study Requirement for Exemption Qualification
A Maryland utility tax study must list every piece of
equipment and appliance (production and non-production) that uses the utility
and the annual consumption of each. Failure to properly calculate or classify
utility usage is cause for denial of the exemption.
Maryland Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 6%
Average Local Sales Tax Rate: 0%
Helpful Resources
Maryland
Utility Exemption Certificate: Form
SUT206
Maryland
Utility Exemption Statute/Rule: Md. Code Regs. 03.06.01.10(A)
Maryland
Claim Form for Tax Refund: SUT205
Refund Application
Manufacturers and industrial processors with facilities
located in Massachusetts, may be eligible for a utility tax exemption.
Massachusetts offers an exemption from state sales tax on the purchase of
electricity, natural gas, and water used in qualifying production activities.
This tax exemption is authorized by Mass. G.L. 64H § 6(i).
Exemption Language of Mass. G.L. 64H § 6(i)
"The sale of gas, steam, or electricity in an
industrial plant area exempt if used in the actual manufacture of tangible
personal property to be sold. This exemption applies only if 75% or more of the
utility consumed at a metered location is consumed either directly in the
manufacturing process or in heating an industrial plant in which a
manufacturing process takes place."
Utility Study Requirement for Exemption Qualification
A Massachusetts utility tax study must list every piece of
equipment and appliance (production and non-production) that uses the utility
and the annual consumption of each. Failure to properly calculate or classify
utility usage is cause for denial of the exemption.
Massachusetts Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 6.25%
Average Local Sales Tax Rate: 0%
Helpful Resources
Massachusetts
Utility Exemption Certificate: Exempt
Use Certificate Form ST-12
Massachusetts
Utility Exemption Statute/Rule: Mass. G.L. 64H § 6(i)
Massachusetts
Claim Form for Tax Refund: Go to utility provider for refund.
Manufacturers and industrial processors with facilities
located in Minnesota, may be eligible for a utility tax exemption. Minnesota offers
an exemption from state and local sales tax on the purchase of electricity,
natural gas, and water used in qualifying production activities. This tax
exemption is authorized by Minn. Admin. Rule 8130.5500(4a).
Exemption Language of Minn. Admin. Rule 8130.5500(4a)
"The purchase of fuel, electricity, gas, steam and
water that is used or consumed directly in agricultural or industrial
production is not taxable."
Utility Study Requirement for Exemption Qualification
A Minnesota utility tax study must list every piece of
equipment used for production purposes and the annual consumption of each. The
consumption of the production equipment is then compared to the actual utility
consumption over 12 months to identify the exemption percentage. The State also
allows a meter read method and meter disk method. Failure to properly calculate
or classify utility usage is cause for denial of the exemption.
Minnesota Statute of Limitations on Tax Refund
3.5 years
State Sales Tax Rate: 6.875%
Average Local Sales Tax Rate: 0.58%
Helpful Resources
Minnesota Utility Exemption Certificate: Form ST3 Certificate of Exemption
Minnesota Utility Exemption Statute/Rule: Minn. Admin. Rule 8130.5500(4a)
Minnesota
Claim Form for Tax Refund: Refund
Request Form ST11
Manufacturers and industrial processors with facilities
located in Mississippi, may be eligible for a utility tax exemption.
Mississippi offers an exemption from state and local sales tax on the purchase
of electricity, natural gas, and water used in qualifying production
activities. This tax exemption is authorized by Miss. Code Ann. § 27-65-107.
Exemption Language of Miss. Code Ann. § 27-65-107
"Sales of electricity, current, power, steam, coal,
natural gas, liquefied petroleum gas or other fuel to a manufacturer, customer
processor…" are exempt from sales tax."
Utility Study Requirement for Exemption Qualification
Mississippi does not have a standard utility tax study
requirement. Please contact us for more information regarding the requirements
for claiming the exemption in Mississippi.
Mississippi Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 7%
Average Local Sales Tax Rate: 7%
Helpful Resources
Mississippi
Utility Exemption Certificate: Affidavit
for Utility Exemption
Mississippi
Utility Exemption Statute/Rule: Miss. Code Ann. § 27-65-107
Mississippi
Claim Form for Tax Refund: N/A
Manufacturers and industrial processors with facilities
located in Missouri, may be eligible for a utility tax exemption. Missouri
offers an exemption from state sales tax on the purchase of electricity,
natural gas, and water used in qualifying production activities. This tax
exemption is authorized by Section 144.054, RSMo.
Exemption Language of Section 144.054, RSMo
"Electrical energy and gas, whether natural,
artificial, or propane, water, coal, and energy sources, chemicals, machinery,
equipment, and materials used or consumed in the manufacturing, processing,
compounding, mining, or producing of any product, or used or consumed in the
processing of recovered materials, or used in research and development related
to manufacturing, processing, compounding, mining, or producing any
product" is exempt from state sales tax, but not local."
Utility Study Requirement for Exemption Qualification
A Missouri utility tax study must list every piece of
equipment and appliance (production and non-production) that uses the utility
and the annual consumption of each. Failure to properly calculate or classify
utility usage is cause for denial of the exemption. A square footage analysis
may also be appropriate in Missouri.
Missouri Statute of Limitations on Tax Refund
10 years
State Sales Tax Rate: 4.225%
Average Local Sales Tax Rate: 3.96%
Helpful Resources
Missouri
Utility Exemption Certificate: Exemption
Certificate Form 149
Missouri
Utility Exemption Statute/Rule: Section 144.054, RSMo
Missouri
Claim Form for Tax Refund: Claim
Form 472P
Manufacturers and industrial processors with facilities
located in Nebraska, may be eligible for a utility tax exemption. Nebraska
offers an exemption from state and local sales tax on the purchase of
electricity, natural gas, and water used in qualifying production activities.
This tax exemption is authorized by REG-1-089.01.
Exemption Language of REG-1-089.01
"The sale purchase, use, or other consumption of
electricity, coal, gas… may be exempt from sales and use tax if more than 50%
of the amount purchases is used or directly consumed in processing,
manufacturing, refining generation of electricity, irrigation or farming."
Utility Study Requirement for Exemption Qualification
A Nebraska utility tax study must list every piece of
equipment and appliance (production and non-production) that uses the utility
and the annual consumption of each. Failure to properly calculate or classify
utility usage is cause for denial of the exemption.
Nebraska Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 5.5%
Average Local Sales Tax Rate: 1.43%
Helpful Resources
Nebraska
Utility Exemption Certificate: Energy
Source Exemption Form 13E
Nebraska
Utility Exemption Statute/Rule: REG-1-089.01
Nebraska
Claim Form for Tax Refund: Claim for
Refund Form 7
Manufacturers and industrial processors with facilities
located in New York, may be eligible for a utility tax exemption. New York
offers an exemption from state and local sales tax on the purchase of
electricity, natural gas, and water used in qualifying production activities.
This tax exemption is authorized by 20
CRR-NY 528.22.
Exemption Language of 20 CRR-NY 528.22
"Fuel, gas, electricity, refrigeration and steam and
gas, electric, refrigeration and steam service of whatever nature is exempt
from the sales and compensating use tax when used directly and exclusively in
the production, for sale, of tangible personal property, gas, electricity,
refrigeration or steam by one of the following endeavors: manufacturing;
processing; assembling; generating; refining; mining; or extracting."
Utility Study Requirement for Exemption Qualification
A New York utility tax study must list every piece of
equipment and appliance (production and non-production) that uses the utility
and the annual consumption of each. Failure to properly calculate or classify
utility usage is cause for denial of the exemption.
New York Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 4%
Average Local Sales Tax Rate: 4.52%
Helpful Resources
New
York Utility Exemption Certificate: Exempt Use
Certificate ST-121
New
York Utility Exemption Statute/Rule: 20
CRR-NY 528.22
New
York Claim Form for Tax Refund: Application
for Refund AU-11
Manufacturers and industrial processors with facilities
located in North Carolina, may be eligible for a utility tax exemption. North
Carolina offers an exemption from state and local sales tax on the purchase of
electricity, natural gas, and water used in qualifying production activities.
This tax exemption is authorized by G.S.
105-164.13(57).
Exemption Language of G.S. 105-164.13(57)
"The following is exempt from sales tax: "Fuel,
electricity, and piped natural gas sold to a manufacturer for use in connection
with the operation of a manufacturing facility. The exemption does not apply to
the following: a. Electricity used at a facility at which the primary activity
is not manufacturing. b. Fuel or piped natural gas that is used solely for
comfort heating at a manufacturing facility where there is no use of fuel or
piped natural gas in a manufacturing process."
Utility Study Requirement for Exemption Qualification
North Carolina does not have a standard utility tax study
requirement. Please contact us for more information regarding the requirements
for claiming the exemption in North Carolina.
North Carolina Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 4.75%
Average Local Sales Tax Rate: 2.22%
Helpful Resources
North
Carolina Utility Exemption Certificate: Certificate of
Exemption E-595E
North
Carolina Utility Exemption Statute/Rule: G.S.
105-164.13(57)
North
Carolina Claim Form for Tax Refund: E-588
Claim for Refund
Manufacturers and industrial processors with facilities
located in Oklahoma, may be eligible for a utility tax exemption. Oklahoma offers
an exemption from state and local sales tax on the purchase of electricity,
natural gas, and water used in qualifying production activities. This tax
exemption is authorized by OAC
710:65-13-150.1(b).
Exemption Language of OAC 710:65-13-150.1(b)
"Purchases by a manufacturer of tangible personal
property or services for use in a manufacturing operation are exempt from sales
and use taxes in Oklahoma...Examples of production supplies include items used
in the production process, such as... Coal, fuel, oil, electricity, natural
gas, artificial gas, steam and refrigeration, when used in the production
process or when used to generate power or to create or maintain a temperature
necessary for the production process."
Utility Study Requirement for Exemption Qualification
An Oklahoma utility tax study must list every piece of
equipment and appliance (production and non-production) that uses the utility
and the annual consumption of each. Failure to properly calculate or classify
utility usage is cause for denial of the exemption.
Oklahoma Statute of Limitations on Tax Refund
Cannot claim a refund unless taxpayer correctly filled out their Packet M exemption and failed to properly file with the utility provider or the utility provider failed to exempt the account.
State Sales Tax Rate: 4.5%
Average Local Sales Tax Rate: 4.44%
Helpful Resources
Oklahoma
Utility Exemption Certificate: Packet M for Oklahoma
Manufacturers
Oklahoma
Utility Exemption Statute/Rule: OAC
710:65-13-150.1(b)
Oklahoma
Claim Form for Tax Refund: Form
13-9 Application for Refund
Manufacturers and industrial processors with facilities
located in Pennsylvania, may be eligible for a utility tax exemption.
Pennsylvania offers an exemption from state and local sales tax on the purchase
of electricity, natural gas, and water used in qualifying production
activities. This tax exemption is authorized by 61
Pa. Code § 32.32 and 32.25.
Exemption Language 61 Pa. Code § 32.32 and 32.25
"The purchase or use of tangible personal property or
services performed thereon by a person engaged in the business of manufacturing
or processing is exempt from tax if the property is predominantly used directly
by him in manufacturing or processing operations." "The purchase of
... electricity by a person engaged in the business of manufacturing,
processing, farming, dairying, printing, mining... may require apportionment
between taxable and exempt use if a portion of the purchase is used directly in
one or more of these business operations."
Utility Study Requirement for Exemption Qualification
A Pennsylvania utility survey must list every piece of
equipment used for production purposes and the annual consumption of each. The
consumption of the production equipment is then compared to the actual utility
consumption over 12 months to identify the exemption percentage. Failure to
properly calculate or classify utility usage is cause for denial of the
exemption.
Pennsylvania Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 6%
Average Local Sales Tax Rate: 0.34%
Helpful Resources
Pennsylvania
Utility Exemption Certificate: Exemption
Certificate REV-1220
Pennsylvania
Utility Exemption Statute/Rule: 61
Pa. Code § 32.32 and 32.25
Pennsylvania
Claim Form for Tax Refund: Petition
for Refund REV-65
Manufacturers and industrial processors with facilities
located in South Carolina, may be eligible for a utility tax exemption. South
Carolina offers an exemption from state and local sales tax on the purchase of
electricity, natural gas, and water used in qualifying production activities.
This tax exemption is authorized by South Carolina Code § 12-36-2120(19).
Exemption Language of South Carolina Code § 12-36-2120(19)
"Electricity used by cotton gins, manufacturers,
miners, or quarriers to manufacture, mine, or quarry tangible personal property
for sale" is exempt from sales tax."
Utility Study Requirement for Exemption Qualification
A South Carolina utility tax study must list every piece of
equipment and appliance (production and non-production) that uses the utility
and the annual consumption of each. Failure to properly calculate or classify
utility usage is cause for denial of the exemption.
South Carolina Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 6%
Average Local Sales Tax Rate: 1.46%
Helpful Resources
South
Carolina Utility Exemption Certificate: Exemption Certificate ST-10
South
Carolina Utility Exemption Statute/Rule: South Carolina Code §
12-36-2120(19)
South Carolina Claim Form for Tax Refund: Claim for Refund ST-14
Manufacturers and industrial processors with facilities
located in Tennessee, may be eligible for a utility tax exemption. Tennessee
offers an exemption from local sales tax and a reduction in state sales tax on
the purchase of electricity, natural gas, and water used in qualifying
production activities. This tax exemption is authorized by Tenn.
Code Ann. S 67-6-206(b).
Exemption Language of Tenn. Code Ann. S 67-6-206(b)
"Tennessee authorizes manufacturers to purchase gas, electricity,
fuel oil, coal and other energy fuels at a reduced sales and use tax rate and
in certain circumstances to purchase such substances entirely exempt from tax.
(b)1 imposes a 1.5% sales and use tax rate on a manufacturer's purchase and use
of such substances. b(3) fully exempts these substances from tax if the
manufacturer can establish (by separate metering) they are used exclusively in
the direct manufacturing process."
Utility Study Requirement for Exemption Qualification
To qualify for the reduced sales tax rate of 1.5%, the
manufacturing process must be described in detail and all applicable equipment
must be documented. To qualify for the full exemption, the utility consumption
must be separately metered.
Tennessee Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 7%
Average Local Sales Tax Rate: 2.53%
Tennessee Utility Exemption Certificate: Energy Fuels Exemption Application RV-F1303101
Tennessee
Utility Exemption Statute/Rule: Tenn.
Code Ann. S 67-6-206(b)
Tennessee
Claim Form for Tax Refund: Claim
for Refund RV-F1403301
Manufacturers and industrial processors with facilities
located in Texas, may be eligible for a utility tax exemption. Texas offers an
exemption from state and local sales tax on the purchase of electricity,
natural gas, and water used in qualifying production activities. This tax
exemption is authorized by Texas
Admin. Code Rule §3.295 (c)(5).
Exemption Language of Texas Admin. Code Rule §3.295 (c)(5)
"Natural gas and electricity are exempted from sales
and use taxes when sold for direct use in powering equipment that qualifies for
exemption under Tax Code, Section 151.318 (Property Used in
Manufacturing)."
Utility Study Requirement for Exemption Qualification
A Texas predominant use study must list every piece of equipment
and appliance (production and non-production) that uses the utility and the
annual consumption of each. Additionally, the study must be signed by an
engineer. Failure to properly calculate or classify utility usage is cause for
denial of the exemption.
Texas Statute of Limitations on Tax Refund
4 years
State Sales Tax Rate: 6.25%
Average Local Sales Tax Rate: 1.94%
Helpful Resources
Texas
Utility Exemption Certificate: Form
01-339
Texas
Utility Exemption Statute/Rule: Texas
Admin. Code Rule §3.295 (c)(5)
Texas Claim Form for Tax Refund: Claim for Refund
Manufacturers and industrial processors with facilities
located in Utah, may be eligible for a utility tax exemption. Utah offers an
exemption from state and local sales tax on the purchase of electricity,
natural gas, and water used in qualifying production activities. This tax
exemption is authorized by Utah
Code § 59-12-104(39).
"Sales of natural gas, electricity, heat, coal, fuel
oil, or other fuels for industrial use" are exempt from sales and use
tax."
Utility Study Requirement for Exemption Qualification
A Utah utility tax study must list every piece of equipment
and appliance (production and non-production) that uses the utility and the
annual consumption of each. Failure to properly calculate or classify utility
usage is cause for denial of the exemption.
Utah Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 6.1%
Average Local Sales Tax Rate: 1.08%
Helpful Resources
Utah
Utility Exemption Certificate: Exemption Certificate
TC-721
Utah
Utility Exemption Statute/Rule: Utah
Code § 59-12-104(39)
Utah
Claim Form for Tax Refund: Application for Refund
TC-62PR
Manufacturers and industrial processors with facilities
located in Vermont, may be eligible for a utility tax exemption. Vermont offers
an exemption from state and local sales tax on the purchase of electricity,
natural gas, and water used in qualifying production activities. This tax
exemption is authorized by 32 V.S.A.
§ 9741(34).
Exemption Language of 32 V.S.A. § 9741(34)
"Sales of electricity, oil, gas, and other fuels used
directly or indirectly in manufacturing tangible personal property for
sale" are exempt from tax."
Utility Study Requirement for Exemption Qualification
A Vermont utility tax study should list every piece of
equipment and appliance (production and non-production) that uses the utility
and the annual consumption of each. A square footage analysis may be
appropriate in Vermont, unless floor space does not accurately reflect usage.
Failure to properly calculate or classify utility usage is cause for denial of
the exemption.
Vermont Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 6%
Average Local Sales Tax Rate: 0.22%
Helpful Resources
Vermont
Utility Exemption Certificate: Form S-3F Exemption
Certificate
Vermont
Utility Exemption Statute/Rule: 32 V.S.A.
§ 9741(34)
Vermont
Claim Form for Tax Refund: Application
for Refund REF-620
Manufacturers and industrial processors with facilities
located in Wisconsin, may be eligible for a utility tax exemption. Wisconsin
offers an exemption from state and local sales tax on the purchase of
electricity, natural gas, and water used in qualifying production activities.
This tax exemption is authorized by Wis.
Stats. § 77.54(30)(a)6.
Exemption Language of Wis. Stats. § 77.54(30)(a)6
"Fuel and electricity consumed in manufacturing
tangible personal property, or items or property under s. 77.52 (1) (b) or (c),
in this state."
Utility Study Requirement for Exemption Qualification
A Wisconsin utility tax study must list every piece of
equipment and appliance (production and non-production) that uses the utility
and the annual consumption of each. Failure to properly calculate or classify
utility usage is cause for denial of the exemption.
Wisconsin Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 5%
Average Local Sales Tax Rate: 0.46%
Helpful Resources
Wisconsin Utility Exemption Certificate: https://www.revenue.wi.gov/DORForms/s-211f.pdf
Wisconsin Utility Exemption
Statute/Rule: Wis.
Stats. § 77.54(30)(a)6
Wisconsin
Claim Form for Tax Refund: Refund Claim Form BCR
Manufacturers and industrial processors with facilities
located in Wyoming, may be eligible for a utility tax exemption. Wyoming offers
an exemption from state and local sales tax on the purchase of electricity,
natural gas, and water used in qualifying production activities. This tax
exemption is authorized by W.S. 39-15-105
(a)(iii)(D).
Exemption Language of W.S. 39-15-105 (a)(iii)(D)
"Sales of power or fuel to a person engaged in
manufacturing, processing, or agriculture when the same is consumed directly in
manufacturing, processing, or agriculture."
Utility Study Requirement for Exemption Qualification
Wyoming provides that exempt purchases of power or fuel must
be separately accounted for by separate metering, storage, or engineered
calculation. Therefore, the most practical option is a detailed utility study
listing every piece of equipment and appliance (production and non-production)
that uses the utility and the annual consumption of each. Failure to properly
calculate or classify utility usage is cause for denial of the exemption.
Wyoming Statute of Limitations on Tax Refund
3 years
State Sales Tax Rate: 4%
Average Local Sales Tax Rate: 1.34%
Helpful Resources
Wyoming
Utility Exemption Certificate: Wyoming
Exemption Certificate
Wyoming
Utility Exemption Statute/Rule: W.S. 39-15-105
(a)(iii)(D)
Wyoming
Claim Form for Tax Refund: N/A